UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM | ||
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 2, 2022
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||
1501 S. MoPac Expressway
Suite 450
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: 512 -892-0400
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
On May 5, 2022, Open Lending Corporation, a Delaware corporation, announced that on May 2, 2022 its wholly-owned subsidiary, Lenders Protection, LLC (“Lenders Protection”), entered into a program management agreement (the “Agreement”) with Arch Specialty Insurance Company (“Arch”), through which Lenders Protection or its affiliate earns claims administration service fees and profit share revenue. Under the Agreement, Arch facilitates the issuance of credit default insurance policies to financial institutions that enter into a program agreement with Lenders Protection for use of its proprietary software platform. The Agreement contains non-competition provisions in favor of Lenders Protection.
The Agreement terminates on April 30, 2027, and will automatically renew for successive one-year terms unless either party provides the other with written notice of termination at least 180 days prior to expiration of the applicable term. Under the Agreement, early termination is permitted under certain circumstances, including without limitation, by either party upon mutual written consent; by either party upon a delivery of notice of termination in connection with certain specified bankruptcy events with respect to the other party; by Arch upon written notice in the event the surplus lines broker agreement is terminated; by either party upon 30 days’ written notice and cure period in the event of a material breach by the other party; by Lenders Protection upon 180 days’ notice to Arch due to certain specified changes of control of Arch; by Arch upon 180 days’ notice to Lenders Protection due to certain specified changes of control of Lenders Protection; by either party upon the expiration of a 30-day cure period if a governmental authority finds the policies issued to financial institutions in connection with the program to be unenforceable; by Lenders Protection upon the expiration of a 30-day cure-period in the event that Arch fails to maintain an “A-” or better “A.M. Best” rating; and by either party immediately in the event of fraud or willful misconduct by the other party.
Neither party may assign the Agreement or any of its rights or delegate any of its duties or obligations thereunder in any transaction that does not constitute a change of control, without the prior written consent of the other party.
Item 2.02 Results of Operations and Financial Condition.
On May 5, 2022, Open Lending Corporation (the “Company”) issued a press release announcing its financial results for the fiscal quarter ended March 31, 2022. A copy of the press release and additional supplemental financial information are attached as Exhibits 99.1 and 99.2, respectively, to this Current Report on Form 8-K and are incorporated by reference herein.
The information furnished under this Item 2.02 and in the accompanying Exhibits 99.1 and 99.2 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing.
Item 8.01. Other Events.
On May 5, 2022, the Company issued a press release announcing entry into the Agreement. A copy of the press release is attached hereto as Exhibit 99.3 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| 99.1 | |||||
| 99.2 | |||||
| 99.3 | |||||
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1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| OPEN LENDING CORPORATION | ||||||||
| By: | /s/ Charles Jehl | |||||||
| Name: | Charles D. Jehl | |||||||
| Title: | Chief Financial Officer | |||||||
Date: May 5, 2022
2
Exhibit 99.1
Open Lending Reports First Quarter 2022 Financial Results
AUSTIN, TX, May 5, 2022 – Open Lending Corporation (Nasdaq: LPRO) (the “Company” or “Open Lending”), a leading provider of lending enablement and risk analytics solutions to financial institutions, today reported financial results for its first quarter of 2022.
“We are pleased with our first quarter results, which included a 32% increase in certified loans, a 14% increase in revenue and a 11% increase in Adjusted EBITDA compared to first quarter of 2021. These strong results are despite near-term headwinds to our business, including low levels of dealer inventory due to the global semiconductor chip shortages and supply chain challenges and inflated used car values and the impact on affordability,” said John Flynn, Chairman and CEO of Open Lending. “During the quarter we added 18 new customers which demonstrates the value proposition of our platform and our continued momentum. We also further penetrated our existing customer base during the quarter, with our top 10 customers, excluding OEMs, increasing their certification volume by 166% in Q122 as compared to Q121.”
Three Months Ended March 31, 2022 Highlights
•The Company facilitated 43,944 certified loans during the first quarter of 2022, compared to 33,318 certified loans in the first quarter of 2021
•Total revenue was $50.1 million during the first quarter of 2022, compared to $44.0 million in the first quarter of 2021
•Gross profit was $45.3 million during the first quarter of 2022, compared to $40.6 million in the first quarter of 2021
•Net income was $23.2 million during the first quarter of 2022, compared to $12.9 million in the first quarter of 2021
•Adjusted EBITDA was $33.8 million during the first quarter of 2022, compared to $30.3 million in the first quarter of 2021
Adjusted EBITDA is a non-GAAP financial measure. Reconciliations of this non-GAAP financial measure to its most directly comparable GAAP financial measure are provided in the financial tables included at the end of this press release. An explanation of this measure and how it is calculated is also included under the heading “Non-GAAP Financial Measures.”
2022 Outlook
Based on the first quarter results and trends into second quarter 2022, the Company is reaffirming its previously issued guidance of the following:
Full Year 2022 Outlook | |||||
| Total Certified Loans | 195,000 - 225,000 | ||||
| Total Revenue | $210 - 240 million | ||||
| Adjusted EBITDA | $135 - 160 million | ||||
Adjusted Operating Cash Flow (a) | $140 - 165 million | ||||
a.Adjusted Operating Cash Flow is defined as Adjusted EBITDA, minus CAPEX, +/- change in contract assets.
The guidance provided above includes forward-looking statements within the meaning of U.S. securities laws. While the financial guidance takes into account the continuing impact of the global COVID-19 pandemic, the impact of the pandemic has been unprecedented and the future effect of the pandemic on the global economy and our financial results remains uncertain, and our actual results may differ materially. See “Forward-Looking Statements” below.
Conference Call
Open Lending will host a conference call to discuss the first quarter 2022 financial results today at 5:00 pm ET. Hosting the call will be John Flynn, Chairman and CEO, Ross Jessup, President and COO, and Chuck Jehl, CFO. The conference call will be webcast live from the Company's investor relations website at https://investors.openlending.com/ under the “Events” section. The conference call can also be accessed live over the phone by dialing (833) 420-0410, or for international callers (236) 714-4304; the conference ID is 8207059. An archive of the webcast will be available at the same location on the website shortly after the call has concluded.
About Open Lending
Open Lending (Nasdaq: LPRO) provides loan analytics, risk-based pricing, risk modeling and default insurance to auto lenders throughout the United States. For over 20 years, we have been empowering financial institutions to create profitable auto loan portfolios by saying “yes” to more automotive loans. For more information, please visit www.openlending.com.
Forward-Looking Statements
This press release includes certain statements that are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995, including statements related to market trends, the impact of the global COVID-19 pandemic on factors impacting the Company’s business, the Company’s new lender pipeline, consumer behavior and demand for automotive loans, as well as future financial performance under the heading “2022 Outlook” above. Forward-looking statements generally are accompanied by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook,” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These statements are based on various assumptions and on the current expectations of the Company’s management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the Company’s control. These forward-looking statements are subject to a number of risks and uncertainties, including general economic, market, political and business conditions; the continuing effects of the COVID-19 pandemic on consumer behavior; applicable taxes, inflation, supply chain disruptions including global hostilities and responses thereto, interest rates and the regulatory environment; the outcome of judicial proceedings to which Open Lending is, or may become a party; failure to realize the anticipated benefits of the business combination with Nebula Acquisition Corporation (“Business Combination”); other risks discussed in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2021 and our subsequently filed Quarterly Reports on Form 10-Q. If the risks materialize or assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that the Company presently does not know or that they currently believe are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect the Company’s expectations, plans or forecasts of future events and views as of the date of this press release. The Company anticipates that subsequent events and developments will cause their assessments to change. However, while the Company may elect to update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing the Company’s assessments as of any date subsequent to the date of this press release. Accordingly, undue reliance should not be placed upon the forward-looking statements.
Non-GAAP Financial Measures
The non-GAAP financial measures included in this press release are financial information that has not been prepared in accordance with GAAP. The Company uses Adjusted EBITDA, Adjusted EBITDA margin and Adjusted operating cash flows internally in analyzing our financial results and believes these measures are useful to investors, as a supplement to GAAP measures, in evaluating our ongoing operational performance. The Company believes that the use of non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial results with other companies in our industry, many of which present similar non-GAAP financial measures to investors.
The Company believes these measures provide useful information to investors and others in understanding and evaluating its operating results in the same manner as its management and board of directors. In addition, these measures provide useful measures for period-to-period comparisons of our business, as they remove the effect of certain non-cash items and certain non-recurring variable charges. Adjusted EBITDA is defined as GAAP net income excluding interest expense, income tax expense, depreciation and amortization expense, share-based compensation expense and loss on extinguishment of debt. Adjusted EBITDA margin is defined as Adjusted EBITDA expressed as a percentage of total revenue. Adjusted operating cash flows is defined as Adjusted EBITDA, minus CAPEX, +/- change in contract assets.
Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measure provided in the financial statement tables included below in this press release.
Contact:
ICR for Open Lending
Investors
openlending@icrinc.com
OPEN LENDING CORPORATION
Condensed Consolidated Balance Sheets
(Unaudited, in thousands, except share data)
| March 31, 2022 | December 31, 2021 | |||||||||||||
| Assets | ||||||||||||||
| Current assets | ||||||||||||||
| Cash and cash equivalents | $ | 147,404 | $ | 116,454 | ||||||||||
| Restricted cash | 3,031 | 3,055 | ||||||||||||
| Accounts receivable, net | 8,060 | 6,525 | ||||||||||||
| Current contract assets, net | 58,265 | 70,542 | ||||||||||||
| Income tax receivable | 2,090 | 1,345 | ||||||||||||
| Other current assets | 1,749 | 4,873 | ||||||||||||
| Total current assets | 220,599 | 202,794 | ||||||||||||
| Property and equipment, net | 2,792 | 2,663 | ||||||||||||
| Operating lease right-of-use assets, net | 5,048 | 5,189 | ||||||||||||
| Non-current contract assets, net | 49,187 | 42,414 | ||||||||||||
| Deferred tax asset, net | 64,949 | 65,503 | ||||||||||||
| Other non-current assets | 157 | 262 | ||||||||||||
| Total assets | $ | 342,732 | $ | 318,825 | ||||||||||
| Liabilities and stockholders’ equity | ||||||||||||||
| Current liabilities | ||||||||||||||
| Accounts payable | 195 | 1,285 | ||||||||||||
| Accrued expenses | 5,510 | 3,984 | ||||||||||||
| Current portion of debt | 3,125 | 3,125 | ||||||||||||
| Third-party claims administration liability | 3,029 | 3,050 | ||||||||||||
| Other current liabilities | 550 | 621 | ||||||||||||
| Total current liabilities | 12,409 | 12,065 | ||||||||||||
| Long-term debt, net of deferred financing costs | 142,437 | 143,135 | ||||||||||||
| Non-current operating lease liabilities | 4,508 | 4,643 | ||||||||||||
| Total liabilities | $ | 159,354 | $ | 159,843 | ||||||||||
| Commitments and contingencies | ||||||||||||||
| Stockholders’ equity | ||||||||||||||
| Preferred stock, $0.01 par value; 10,000,000 shares authorized, none issued and outstanding | — | — | ||||||||||||
| Common stock, $0.01 par value; 550,000,000 shares authorized, 128,198,185 shares issued and 126,217,955 shares outstanding as of March 31, 2022 and 128,198,185 shares issued and 126,212,876 shares outstanding as of December 31, 2021 | 1,282 | 1,282 | ||||||||||||
| Additional paid-in capital | 498,057 | 496,983 | ||||||||||||
| Accumulated deficit | (259,285) | (282,439) | ||||||||||||
| Treasury stock at cost, 1,980,230 shares at March 31, 2022 and 1,985,309 at December 31, 2021, respectively | (56,676) | (56,844) | ||||||||||||
| Total stockholders’ equity | 183,378 | 158,982 | ||||||||||||
| Total liabilities and stockholders’ equity | $ | 342,732 | $ | 318,825 | ||||||||||
OPEN LENDING CORPORATION
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except share data)
| Three Months Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Revenue | |||||||||||
| Profit share | $ | 28,310 | $ | 27,730 | |||||||
| Program fees | 19,726 | 14,911 | |||||||||
| Claims administration and other service fees | 2,032 | 1,367 | |||||||||
| Total revenue | 50,068 | 44,008 | |||||||||
| Cost of services | 4,788 | 3,362 | |||||||||
| Gross profit | 45,280 | 40,646 | |||||||||
| Operating expenses | |||||||||||
| General and administrative | 7,482 | 8,212 | |||||||||
| Selling and marketing | 3,733 | 2,397 | |||||||||
| Research and development | 1,823 | 591 | |||||||||
| Total operating expenses | 13,038 | 11,200 | |||||||||
| Operating income | 32,242 | 29,446 | |||||||||
| Interest expense | (803) | (3,289) | |||||||||
| Interest income | 25 | 84 | |||||||||
| Loss on extinguishment of debt | — | (8,778) | |||||||||
| Other expense | — | (131) | |||||||||
| Income before income taxes | 31,464 | 17,332 | |||||||||
| Income tax expense | 8,310 | 4,470 | |||||||||
| Net income | $ | 23,154 | $ | 12,862 | |||||||
| Net income per common share | |||||||||||
| Basic | $ | 0.18 | $ | 0.10 | |||||||
| Diluted | $ | 0.18 | $ | 0.10 | |||||||
| Weighted average common shares outstanding | |||||||||||
| Basic | 126,215,698 | 126,803,096 | |||||||||
| Diluted | 126,216,197 | 126,837,832 | |||||||||
OPEN LENDING CORPORATION
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
| Three Months Ended March 31, | ||||||||||||||
| 2022 | 2021 | |||||||||||||
| Cash flows from operating activities | ||||||||||||||
| Net income | $ | 23,154 | $ | 12,862 | ||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
| Share-based compensation | 1,281 | 701 | ||||||||||||
| Depreciation and amortization | 304 | 388 | ||||||||||||
| Non-cash operating lease cost | 141 | 134 | ||||||||||||
| Loss on extinguishment of debt | — | 8,778 | ||||||||||||
| Deferred income taxes | 554 | 1,330 | ||||||||||||
| Changes in assets & liabilities: | ||||||||||||||
| Accounts receivable, net | (1,535) | (2,451) | ||||||||||||
| Contract assets, net | 5,504 | (7,876) | ||||||||||||
| Other current and non-current assets | 3,066 | 1,979 | ||||||||||||
| Accounts payable | (1,090) | (611) | ||||||||||||
| Accrued expenses | 1,526 | 478 | ||||||||||||
| Income tax payable/receivable | (745) | 3,151 | ||||||||||||
| Operating lease liabilities | (119) | (140) | ||||||||||||
| Third-party claims administration liability | (21) | 62 | ||||||||||||
| Other current and non-current liabilities | (88) | 50 | ||||||||||||
| Net cash provided by operating activities | 31,932 | 18,835 | ||||||||||||
| Cash flows from investing activities | ||||||||||||||
| Purchase of property and equipment | (186) | (3) | ||||||||||||
| Net cash used in investing activities | (186) | (3) | ||||||||||||
| Cash flows from financing activities | ||||||||||||||
| Proceeds from term loans | — | 125,000 | ||||||||||||
| Proceeds from revolving facility | — | 50,000 | ||||||||||||
| Payments on term loans | (781) | (166,847) | ||||||||||||
| Payment of deferred financing costs | — | (1,491) | ||||||||||||
| Shares withheld for taxes for restricted stock units | (39) | — | ||||||||||||
| Net cash (used in) provided by financing activities | (820) | 6,662 | ||||||||||||
| Net change in cash and cash equivalents and restricted cash | 30,926 | 25,494 | ||||||||||||
| Cash and cash equivalents and restricted cash at the beginning of the period | 119,509 | 104,148 | ||||||||||||
| Cash and cash equivalents and restricted cash at the end of the period | $ | 150,435 | $ | 129,642 | ||||||||||
| Supplemental disclosure of cash flow information: | ||||||||||||||
| Interest paid | $ | 721 | $ | 2,722 | ||||||||||
| Income tax paid (refunded), net | 8,501 | (16) | ||||||||||||
| Non-cash investing and financing: | ||||||||||||||
| Internally developed software accrued but not paid | $ | — | $ | 463 | ||||||||||
| Deferred financing costs accrued but not paid | — | 178 | ||||||||||||
OPEN LENDING CORPORATION
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited, in thousands)
| Three Months Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Net income | $ | 23,154 | $ | 12,862 | |||||||
| Non-GAAP adjustments: | |||||||||||
| Interest expense | 803 | 3,289 | |||||||||
| Income tax expense | 8,310 | 4,470 | |||||||||
| Depreciation and amortization expense | 221 | 193 | |||||||||
| Share-based compensation | 1,281 | 701 | |||||||||
| Loss on extinguishment of debt (1) | — | 8,778 | |||||||||
| Total adjustments | 10,615 | 17,431 | |||||||||
| Adjusted EBITDA | 33,769 | 30,293 | |||||||||
| Total revenue | $ | 50,068 | $ | 44,008 | |||||||
| Adjusted EBITDA margin | 67 | % | 69 | % | |||||||
| Adjusted operating cash flows (2) | |||||||||||
| Adjusted EBITDA | $ | 33,769 | $ | 30,293 | |||||||
| CAPEX | (186) | (3) | |||||||||
| Decrease (increase) in contract assets, net | 5,504 | (7,876) | |||||||||
| Adjusted operating cash flows | $ | 39,087 | $ | 22,414 | |||||||
Notes:
(1)Reflects unamortized deferred financing costs that were written off in connection with the refinancing of our Term Loan due 2027 on March 19, 2021.
(2)Adjusted operating cash flow is defined as Adjusted EBITDA, minus CAPEX, +/- change in contract assets.
Earnings Supplement Q1 2022
2 Q1 2022 Financial Highlights Q1 2022 (1) See reconciliation of GAAP to non-GAAP financial measures on page 7 (2) Defined as Adj. EBITDA, minus CAPEX, +/- change in contract assets Q1 2021 Revenue $50.1 million $44.0 million Adj. EBITDA1 $33.8 million $30.3 million Adj. Operating Cash Flow2 $39.1 million $22.4 million Total Certs 43,944 33,318
3 Well Defined Growth Plan Expand Core Business1 OEM Opportunity2 CECL Relief 3 4 6 5 Broaden Our Offerings Launch into New Channels Refinance Opportunities Near Term Growth Strategy Longer Term Growth Strategy ▪ Drive Loan Volume through Further Wallet-Share Increase and Customer Penetration ▪ Expansion of Lender Base ▪ Increase OEM Captive Penetration by Addressing Broader Credit Spectrum and Deployment of Subvention Capabilities ▪ Enhanced Value Proposition to Lenders Provided via CECL Relief ▪ Increased Profitability for Financial Institutions in Near Prime Auto ▪ Enhanced Focus on Refinance Program to Drive Additional Cert Volume ▪ Ease of Customer Access in Reduced Interaction Environment ▪ Expansion into Adjacent Asset Classes (e.g., leases) ▪ Establish Broader Auto Platform (e.g., hub and spoke) ▪ Prime Decisioning SaaS Solution ▪ Expansion into Other Consumer Asset Classes
4 ($1.7) $5.3 $6.2 $4.0 $7.8 $10.5 $9.5 $2.9 ($12.0) $0.7 ($1.5) $1.3 $1.1 $4.0 ($3.0) ($3.0) ($0.3) Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Understanding Changes in Contract Assets and Profit Share Revenue In LTM period on a net basis, ~108% of Changes in Contract Asset Estimates Driven by Realized Portfolio Performance as Opposed to Changes in Prospective Estimates Prospective Changes in Assumptions Realized Portfolio Performance ($ in millions) Change in Contract Asset Estimates and Profit Share Revenue: ($12.0) ($0.9) $3.8 $7.5 $5.1 $11.8 Covid Impact Lower than projected claims and severity of losses in historical periods drove positive changes to contract asset estimates that in turn drive strong near-term cash flows $7.5 $6.5 $2.6
5 Three Months Ended March 31, 2022 2021 Certs Credit Unions & Bank Certified Loans (Certs) 38,520 21,927 OEM Certs 5,424 11,391 Total Certs 43,944 33,318 Unit Economics Avg. Profit Share Revenue per Cert (1) 584$ 680$ Avg. Program Fee Revenue per Cert 449$ 448$ Originations Facilitated Loan Origination Volume ($ in 000) 1,182,567$ 780,341$ Average Loan Size 26,911 23,421 Channel Overview New Vehicle Certs as a % of Total 5.6% 15.9% Used Vehicle Certs as a % of Total 94.4% 84.1% Indirect Certs as a % of Total 45.8% 69.3% Direct Certs as a % of Total 14.4% 16.8% Refinance Certs as % of Total 39.8% 13.9% (1) Represents average profit share revenue per certified loan originated in the period excluding the impact of profit share revenue recognized in the period associated with historical vintages. The profit share revenue impact related to change in estimates of historical vintages was $2.6 million and $5.1 million, for the three months ended March 31, 2022 and 2021, respectively. Q1 2022 Key Performance Indicators
6 Q1 2022 Financial Update
7 Adjusted EBITDA 2022 2021 Net income 23,154$ 12,862$ Non-GAAP adjustments: Interest expense 803 3,289 Income tax expense 8,310 4,470 Depreciation and amortization expense 221 193 Share-based compensation 1,281 701 Loss on extinguishment of debt (1) - 8,778 Total adjustments 10,615 17,431 Adjusted EBITDA 33,769 30,293 Total revenue 50,068$ 44,008$ Adjusted EBITDA margin 67% 69% Adjusted operating cash flows (2) Adjusted EBITDA 33,769$ 30,293$ CAPEX (186) (3) Decrease (increase) in contract assets 5,504 (7,876) Adjusted operating cash flows 39,087$ 22,414$ Three Months Ended March 31, (1) Reflects unamortized deferred financing costs that were written off in connection with the refinancing of our Term Loan due 2027 on March 19, 2021. (2) Adjusted operating cash flow is defined as Adjusted EBITDA, minus CAPEX, +/- change in contract assets. Reconciliation of GAAP to Non-GAAP Financial Measures ($ in 000)
8 Total Current Share Count Shares In millions Total Shares Outstanding May 5, 2022 126.2 Treasury Shares 2.0 Total Shares Issued 128.2
Exhibit 99.3
Open Lending Signs Agreement with Arch Specialty Insurance Company
Arch Insurance will be the Company’s Fourth Insurance Carrier Partner
AUSTIN, TX – May 5, 2022 – Open Lending Corporation (NASDAQ: LPRO) (“Open Lending” or “the Company”), a leading provider of lending enablement and risk analytics solutions to financial institutions, today announced that the Company has signed a Program Management Agreement with Arch Specialty Insurance Company, a member company within Arch Insurance North America (“Arch Insurance”), enabling them to be an additional provider of credit default insurance policies for Open Lending’s Lenders Protection Program.
“We are excited to announce Arch Insurance as our newest insurance carrier partner,” said John Flynn, Chairman and CEO of Open Lending. “Arch Insurance is part of a global enterprise offering superior coverage and service with over 20 years of operating history and strong financial ratings. We believe there is a lot of alignment between our missions and values, and are looking forward to growing our businesses together to insure more auto loans. We believe that there is plenty of volume to support additional insurance carriers while continuing to deepen our valued relationships with our existing carriers.”
“We believe the Lenders Protection Program is a very unique offering for lenders,” said Emilee Kuhn, Executive Vice President, Arch Warranty Lender Solutions at Arch Insurance. “We look forward to helping Open Lending further expand their program to credit unions, banks and OEMs across the U.S.”
About Open Lending
Open Lending (NASDAQ: LPRO) provides loan analytics, risk-based pricing, risk modeling and default insurance to auto lenders throughout the United States. For over 20 years we have been empowering financial institutions to create profitable auto loan portfolios by saying “yes” to more automotive loans. For more information, please visit www.openlending.com.
About Arch Insurance North America www.archinsurance.com
Arch Insurance North America, part of Arch Capital Group Ltd., includes Arch’s insurance operations in the United States and Canada. Business in the U.S. is written by Arch Insurance Company, Arch Specialty Insurance Company, Arch Excess & Surplus Insurance Company and Arch Indemnity Insurance Company. Business in Canada is written by Arch Insurance Canada Ltd.
Contact:
ICR for Open Lending
Investors
openlending@icrinc.com